Stem cells undergo a stereotypic pattern of asymmetric division that generates daughter cells with different fates. Such divisions supply differentiated cells, which replenish cells lost throughout an animal's lifetime. The stem cells typically reside in specialized microenvironments called niches that allow them to retain the characteristics of a stem cell. Future advancement in regenerative medicine and cancer therapy require an understanding of the molecular mechanisms by which quantity, quality, and activity of stem cells are precisely regulated in the niche. The objective of the proposed research is to understand fundamental principles of poorly understood stem cell behaviors, including stem cell competition, replacement, and damage response. To elucidate the mechanisms of stem cell control in the extracellular environment, we will focus on the role of heparan sulfate proteoglycans (HSPGs) in this regulation using the genetically tractable model organism Drosophila. HSPGs are a special type of carbohydrate-modified proteins that play an essential role in signaling and distribution of various growth factors, including bone morphogenetic proteins, Wnt/Wingless, and Hedgehog. Several classes of HSPGs are evolutionarily conserved: Drosophila has a single Syndecan gene, two glypicans, Dally and Dally-like protein, and the Drosophila perlecan is called Trol. The fact that most niche factors thus far identified ar heparan sulfate (HS)-dependent suggests the importance of HSPGs in the stem cell niche. Our studies in the previous funding period as well as preliminary results demonstrated that HSPGs control different aspects of stem cell behavior. First, in the follicle stem cell (FSC) niche, Dall and Dlp regulate stem cell competition for niche occupancy and replacement. Although first identified in Drosophila, stem cell competition and replacement are general characteristics of stem cells, including in mammals. Second, HSPGs are essential for midgut regeneration after tissue-damage. Specifically, we found that HSPGs regulate the proliferative activity and cell division orientation of intestinal stem cells (ISCs) in response to bacterial infection. The Drosophila midgut is remarkably similar to the vertebrate intestine at the cellular and molecular levels, and thus our findings on the regulation of ISCs are expected to have clinical relevance. We propose to define the molecular mechanisms of how HSPGs control these stem cell behaviors, using these powerful Drosophila adult stem cell models through the following Specific Aims. Aim 1. Elucidate the mechanism by which HSPGs regulate stem cell competition for niche occupancy. Aim 2. Reveal the cellular and molecular basis for the FSC niche. Aim 3. Define the role of HSPGs in stem cell damage-response in the midgut.